1. AGGREGATE
RESOURCE
PLANNING
A presentation by:
Marcelo Augusto A. Cosgayon

2. ELEMENTS OF RESOURCE PLANNING
1. Material Requirements Planning (MRP)
2. Capacity Requirements Planning (CRP)
3. Enterprise Resource Planning (ERP)
4. Customer Relationship Management (CRM)
5. Supply Chain Management (SCM)
6. Product Lifecycle Management (PLM)

3. MATERIAL REQUIREMENTS PLANNING (MRP)
A production planning, scheduling, and inventory
control system used to manage manufacturing
processes.

4. OBJECTIVES
The main objective of any inventory system is to ensure
that material is available when needed.
One objective of MRP is to maintain the lowest possible
level of inventory. MRP does this by determining when
component items are needed and scheduling them to be
ready at that time, no earlier and no later.

5. BENEFITS
• Able to handle inventory of different materials like:
• raw materials
• components
•finished goods
• Incorporates other production scheduling system activities:
•planned purchasing activities
• manufacturing activities
• delivery schedules
• Ability to keep schedules valid and up to date

6. RESOURCE PLANNING FLOWCHART
Sales and Operations Plan
Shop Floor ControlInventory
Capacity Requirements Planning
Material Requirements Planning
Master Production Schedule
Customer OrdersForecast
Feasible?
Feasible?
Purchase Orders Work Orders
Manufacture
Yes
Yes
No
No

7. WHEN TO USE MRP
• Dependent and discrete demand items
• Complex products
• Job shop or erratic production
• Assemble-to-order environments

8. INPUTS AND OUTPUTS IN MRP PROCESS
• Master Production Schedule
• Product Structure File
• Item Master File
• Planned Order Releases
• Work Orders
• Purchase Orders
• Rescheduling Notices

9. MASTER PRODUCTION SCHEDULE
The Master Production Schedule (MPS) provides a
comprehensive schedule for production, controlling the
following:
• what to produce
• how many are needed
• when these are needed

10. PRODUCT STRUCTURE FILE
A file that contains a computerized bill of material for
every item produced
Bill of material (BOM): a list of all the materials,
parts, and assemblies that make up a product,
including quantities, parent–component
relationships, and order of assembly

11. BILL OF MATERIAL (BOM)
A list of all the materials, parts, and assemblies that
make up a product, including quantities, parent–
component relationships, and order of assembly

12. KINDS OF BILLS OF MATERIAL
• Phantom – materials immediately consumed
• K Bill - group small, loose parts such as fasteners, nuts,
and bolts together
• Modular - major subassemblies or modules that are later
assembled into the final product with customer-designated
options
• Time Phased – shows lead time to purchase or
manufacture an item

13. ITEM MASTER FILE
Contains an extensive amount of information on
every item that is produced, ordered, or inventoried
in the system. Also known as an inventory file
Contains:
• on-hand quantities
• on-order quantities
• Lot sizes
.
• safety stock
• lead time
• past usage figures

14. INPUTS AND OUTPUTS IN MRP PROCESS
Master Production Schedule
Product Structure File Material Requirements Planning
Planned Order Releases
Rescheduling NoticesPurchase OrdersWork Orders
Item Master File

15. CAPACITY REQUIREMENTS PLANNING (CRP)
The process by which a company figures out how
much it needs to produce, and determines if it is
capable of meeting those production goals.

16. MAJOR INPUTS TO CRP
• Planned Order Releases – from the MRP process
• Routing File - specifies which machines or workers are
required to complete an order from the MRP plan, in what
order the operations are to be conducted, and the length of
time each operation should take
•Open Orders File - contains information on the status of
jobs that have already been released but have not yet been
completed.

17. MAJOR INPUTS TO CRP
Capacity
Requirements
Planning
Open Orders FileRouting File
Planned Order Releases
Load Profile

18. CALCULATING CAPACITY
Capacity is the maximum capability to produce.
Measured in:
• units of output
• money of output
• hours of work
• number of customers processed

19. FACTORS AFFECTING CAPACITY
• Product or Service Mix
• Choice of technology
• Size of facility
• Resources allocated

20. CAPACITY TERMS
Rated capacity - theoretical output that could be attained if a process were
operating at full speed without interruption, exceptions, or downtime
Effective capacity - takes into account the efficiency with which a particular
product or customer can be processed, and the utilization of the scheduled
hours of work
Utilization – percentage of available working time actually used
Efficiency - how well a machine or worker performs compared to a standard
output level
Load - standard hours of work (or equivalent units of production) assigned to a
production facility.
•

21. ENTERPRISE RESOURCE PLANNING
Enterprise Resource Planning (ERP) is an industry term for the broad set of
activities that helps an organization manage its business, mainly by collecting,
storing, managing, and interpreting data from such activities as:
•Product Planning
•Manufacturing or Service Delivery
•Marketing and Sales
•Inventory Management
•Shipping and Payment
•Finance

22. ENTERPRISE RESOURCE PLANNING
Software that organizes and manages a company’s business
processes by sharing information across functional areas. It
transforms transactional data into useful information that supports
business decisions in other parts of the company

23. MAIN CATEGORIES OF ERP
MODULES
1. Finance and accounting
2. Sales and marketing
3. Production and materials management
4. Human resources

24. ERP VENDORS
Vendor Type
SAP Large enterprise, discrete manufacturing
Oracle Large enterprise, discrete manufacturing and services
PeopleSoft Human resources and employee relationship management
Siebel Systems Customer relationship management
Microsoft Dynamics Small to mid market ERP, CRM
I2 Technologies Supply chain management
PTC, EDS, Dassault
Systems
Product lifecycle management
SCT Process Industry Education, energy

25. STEPS IN CHOOSING ERP
• Analyze business process
• Choose modules to Implement
• Align level of sophistication
• Finalize delivery and access
• Link with external partners

26. CUSTOMER RELATIONSHIP MANAGEMENT
(CRM)
Refers to practices, strategies, and technologies that
companies use to manage and analyze customer
interactions and data throughout the customer
lifecycle, with the goal of improving business
relationships with customers, assisting in customer
retention and driving sales growth.

27. CUSTOMER RELATIONSHIP MANAGEMENT
(CRM)
Software that plans and executes business
processes involving customer interaction, such as
sales, marketing, fulfillment, and customer service.

28. SUPPLY CHAIN MANAGEMENT (SCM)
The oversight of materials, information, and finances
as they move in a process from supplier to
manufacturer to wholesaler to retailer to consumer.
Supply chain management involves coordinating
and integrating these flows both within and among
companies.

29. SUPPLY CHAIN MANAGEMENT (SCM)
Includes
1. Supply chain planning
2. Supply chain execution
3. Supplier relationship management

30. SUPPLY CHAIN MANAGEMENT (SCM)
Supply Chain Planning involves designing the
supply chain network, demand planning, and
collaborative supply planning.

31. SUPPLY CHAIN MANAGEMENT (SCM)
Supply Chain Execution involves fulfillment,
manufacturing, and delivery

32. SUPPLY CHAIN MANAGEMENT (SCM)
Supplier Relationship Management handles all the
interactions with suppliers from supplier certification
to quality assurance, contracts, and agreements

33. PRODUCT LIFECYCLE MANAGEMENT (PLM)
The process of managing the entire lifecycle of
a product from inception, through engineering design
and manufacture, to service and disposal of
manufactured products.

34. PRODUCT LIFECYCLE MANAGEMENT (PLM)
Software that manages the following:
1. Product development process
2. Product lifecycles
3. Design collaboration with suppliers and
customers.

35. PRODUCT LIFECYCLE MANAGEMENT (PLM)
• Manages product data through the life of the
product
• Coordinates product and processes redesign
• Collaborates with suppliers and customers in the
design process

36. INTEGRATION OF ELEMENTS

37. Suppliers
Customers
Product Design
Manufacture and
Delivery
Product Lifecycle
Management
(PLM)
Enterprise
Resource
Planning (ERP)
Supply Chain Management (SCM)
Customer Relationship Management (CRM)
TimetoMarket
TimetoCustomer

38. ELEMENTS OF RESOURCE PLANNING
1. Material Requirements Planning (MRP)
2. Capacity Requirements Planning (CRP)
3. Enterprise Resource Planning (ERP)
4. Customer Relationship Management (CRM)
5. Supply Chain Management (SCM)
6. Product Lifecycle Management (PLM)